Verizon has completed the $1.8 billion purchase of XO's fiber business, a move that sets the stage nicely for the operator's 5G deployment and trials expected this year.
Further boosting the power of the deal, Verizon Communications Inc. (NYSE: VZ) also announced that it has entered into a deal to lease certain wireless spectrum from former XO Communications Inc. affiliate NextLink Wireless. And according to the operator, Verizon has an option, exercisable under certain circumstances, to buy Nextlink Wireless Inc. (See Verizon Completes XO's Fiber Business Purchase.)
With XO's fiber in its coffers, Verizon plans to not only densify its cellular network and deploy 5G, but also expand its network service offerings, including video, to its enterprise and wholesale customers. (See Verizon Sees Video Through Rings of Fiber.)
Integration of all XO operations and facilities is expected to commence immediately: Verizon anticipates the transaction will deliver in excess of $1.5 billion in operating and expense savings in net present value, according to today's announcement.
In September, Verizon's CFO Fran Shammo told the audience at a Goldman Sachs & Co. conference that Verizon's fixed wireless 5G, with 1 Gbit/s connections to the home, will take on cable, "or any broadband connection for that matter," and that deploying 5G will be much cheaper than deploying FiOS. (See Verizon CFO: Eat Our (Fixed) 5G Dust!)
He also said that the company's key advantage in deploying 5G is the rights to lease 28GHz bandwidth from NextLink. "That covers 40% of the US," he said then, adding "That's all licensed for fixed wireless use for the time being, as per the Federal Communications Commission (FCC) rules. We're hoping that'll become mobile at some point down the road."
- Verizon Bags XO for $1.8B
- Verizon Uses Fios as Shiny Object in Q4
- Verizon Will Pilot 5G Fixed Wireless in 2017
- Verizon Updates 5G Spec, Could Launch Ahead of 3GPP
— Elizabeth Miller Coyne, Managing Editor, Light Reading